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alwayspuzzled Posts: 316 Forumite
24 January 2011 pm31 11:18PM in
Trying to make sure I'm planning my finances correctly and can't work out the tax credits situation.
Currently OH and I are self employed, work full time, have annual income of about £16,000 each, get child tax credits and childcare element of working tax credits (3 children - 12,9,4).
I am 22 wks pregnant, due end of May. I am hoping to work till mid April, I will then be claiming Maternity Allowance for 39 weeks.
I have read that we can still claim tax credits and that the first £100 (ish can't remember exact figure) of MA doesn't have be declared as income for TC purposes. BUT if I'm on maternity leave I'm not working so will no longer be in the 30hrs plus category so surely we will no longer be eligible for TC?
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jamieamelia Posts: 152 Forumite
25 January 2011 am31 9:33AM
i am currently on maternity and claiming maternity allowance, because mat allowance is not taxable you dont declare any of it to tax credits, you just tell them you are on maternity. you are still classed as employed whilst on maternity. (thats what tax credits told me) but if you decide not to work after 39 weeks you must inform them as they will change your claim to unemployed.
all i had to do was give them a new estimate of earnings as i had gone down so much and then they changed my claim, and i only had to include my earnings up to the date i went on mat leave because the 39 weeks of maternity allowance = £0 on tax credit claim.
i hope this makes sense and helps, -
alwayspuzzled Posts: 316 Forumite
25 January 2011 pm31 7:46PM
jamieamelia wrote: »
i am currently on maternity and claiming maternity allowance, because mat allowance is not taxable you dont declare any of it to tax credits, you just tell them you are on maternity. you are still classed as employed whilst on maternity. (thats what tax credits told me) but if you decide not to work after 39 weeks you must inform them as they will change your claim to unemployed.
all i had to do was give them a new estimate of earnings as i had gone down so much and then they changed my claim, and i only had to include my earnings up to the date i went on mat leave because the 39 weeks of maternity allowance = £0 on tax credit claim.
i hope this makes sense and helps,Thanks thats really helpful to know. I presume they would actually increase our payments as my income will obviously drop a lot. If I decide not to return to self employment until the baby is 12 months and tax credits then register me as unemployed for the last 3 months would I then be left in a position of having been overpaid? Don't want to end up owing them money:eek:
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jamieamelia Posts: 152 Forumite
25 January 2011 pm31 9:07PM
yes my payments got increased as my earnings went down and because they went down by quite a bit i think they also owe me some money in april when its time to renew as apparently they hold some back incase of overpaying you. as long as you inform them after the 9 months that you wont be going back to work they will just adjust your payments accordingly, so you may just go down a little bit and they wouldn't pay childcare costs but you wouldn't owe them money i dont think, best thing to do is just phone them as soon as everything changes, i call them all the time, as soon as anything changes and i have never owed them money.
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